New Delhi: Packaged foods maker MTR Foods is close to buying a controlling stake in Eastern Condiments, the Kerala-based spices and mixes maker, to get a larger footprint in the market for non-vegetarian spices, ready-to-cook foods and condiments, three officials with knowledge of the development said.

Eastern Condiments is valued at ₹1,800-2,000 crore, one official said.

MTR Foods, a subsidiary of Norwegian conglomerate Orkla, with revenue of almost ₹900 crore, makes and sells spices, condiments, ready-to-cook breakfast mixes and ready-to-eat meals, beverages and sweets.

The Meeran family, promoters of Eastern Condiments, hold 74% in the business and have been trying to sell their controlling stake for over a year. US-based spices, seasonings and mixes company McCormick & Co. holds 26% in Eastern Condiments, a stake acquired for $35 million in 2010. It’s not clear if McCormick plans to sell shares in Eastern.

An MTR spokesperson said in an email response that the company does not comment on merger and acquisition activities in general.


“We have no comments to offer on the same,” the chairman’s office at Eastern Condiments said in an email in response to ET’s queries.

The deal is said to have been structured by Avendus Capital. A query addressed to Avendus Capital cofounder Gaurav Deepak remained unanswered.

“Eastern has an established presence in markets like Uttar Pradesh, Maharashtra, Rajasthan, Kerala and Tamil Nadu, in both the non-vegetarian and vegetarian space. For MTR, the deal would be a scalable one and give it a captive market in the specialised non-vegetarian space as well,” the official said.

Set up by entrepreneur ME Meeran in 1989, Eastern Condiments sells spices, blends, pickles and rice-based products under the Eastern brand. MTR Foods set up a ₹50 crore seed fund last year to invest in startups engaged in the food processing businesses. One of its first investments was in Bengaluru-based children’s foods maker FirmRoots.

MTR competes with Everest, MDH, Badshah Masala, Catch, Ramdev Masala, Mother’s Recipe and Priya in spices and condiments and with Gits, Nestle, Marico, PepsiCo and Kellogg in the breakfast space. Annual sales in the spices and seasonings category are estimated at ₹40,000 crore, with the branded segment accounting for less than a fourth of the market.

Analysts said investor interest in the branded spices market is escalating – from private equity companies and larger FMCG companies looking to expand portfolios – with consumers opting for packaged products instead of loose stocks sold by local dealers. In addition, there is potential to expand to related categories such as pre-mixed curries, pickles and even hyper-local beverages.

Kolkata-based Sunrise Foods and Badshah Masala are among those that have been wooed by investors including Capital Foods and Carlyle Group.

MTR close to buying eastern condiments

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